Tag - Tgic

As of press time, 1:00 P.M. eastern, stocks are trading down. The Dow was at 9,324; the Nasdaq at 1,987; and the S&P 500 holding over the crucial 1,000 level at 1,005.

Holding their own were small-cap stocks in the Russell 2000, down on 1/10th of one percent at 572.

Small-cap leading today's declines include Triad Guaranty (Nasdaq:TGIC) down 21% on reporting after Friday's close that the firm posted a net quarterly loss of $359 million versus a net loss of only $199 million from the year ago same period; General Steel Holdings (NYSE:GSI) down 13% on reporting that Q2 losses had widened to $31.8 million from $24.3 million; and Allied Capital (NYSE:ALD) down 13% posting Q2 losses of $0.16 per share and remaining in default on its debt.

That stocks are trading down as little as they are suggests traders are pausing as they await major retailer earnings reports and the results from the Federal Reserve meeting that begins on Tuesday. While the general expectation is that the Fed will maintain rates where they are, they are expected to possibly suggest an extension of the Term Asset-Backed Securities Loan Facility (TALF). The TALF was recently broadened to include commercial mortgage-backed securities.

*****Nobel Prize winning economist Paul Krugman thinks August is the trough month for the U.S. economy. And yes, he is reading a lot into the improved unemployment numbers from July.

Of course, it took trillions in direct spending, guarantees and loans to do it, but he believes we've got actual growth coming. It's worth noting, too, that Krugman estimates the stimulus plans have saved 1 million jobs. So, without the stimulus, unemployment would be around 12%.

*****Krugman's not the only one feeling good about the economy. Also at the Capital Markets Symposium in Kuala Lumpur, economists Laura Tyson (White House economic advisor) and Raghuram Rajan (former IMF lead economist) echoed his feelings. We even heard that a new bull market is here from Goldman's reclusive strategist Abby Joseph Cohen. 

The evidence? Well, there's the improved unemployment numbers, better than expected Q2 GDP number, improved manufacturing numbers, and improvement in the Case-Shiller home price index.

What's missing? Retail sales and commercial real estate.

*****Last week, we got sales reports from a variety of retailers, and they were not good. Clearly with 6.5 million people out of work, there's simply not as much money to be spent. But perhaps equally important is whether employed consumers start to feel more secure and start spending more.

This week, we get earnings from Wal-Mart (NYSE:WMT) and Macy's (NYSE:M). I expect Wal-Mart will be fine. I'm not so sure about Macy's. Investors are also looking forward to back-to-school shopping. Early expectations are that sales will not be good for back-to-school. That probably means there's room for an upside surprise.

Of course, stabilization of the unemployment rate is critical for spending. But so is new job creation. And frankly, that still seems likely to take some time. It's likely that GDP growth is capped at 2% for 2010, and probably 2011, too.

*****We've discussed commercial real estate here in SCI Daily. Now, the Fed appears ready to discuss this issue. It's reported that the FOMC will have commercial real estate on the agenda at this weeks' meeting. That sounds like bad news for the bears…

If the Fed wants to do something about commercial real estate, it certainly can attack the problem via interest rates or loan guarantees. And with another weight lifted off the market's shoulders, we could expect stock prices to head higher.

*****The SmallCapInvestor PRO portfolio is doing exceptionally well. Open positions include gains of 34%, 45%, 67%, 70% the open positions current portfolio. We've racked up 15 winning recommendations and just one 3% loser. Click here if you're looking to add some juice to your investment returns.

*****I'd like to thank SCI Daily readers for your help with the T-shirt slogan contest to support the launch of my first book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks. We've stopped taking submissions for the slogan. We're going through them now and will post the very best to our Facebook page for you to vote on. Watch this space for more information and how you can vote.

Everyone who submitted a T-shirt slogan received a 30-day, 100% complimentary trial to my SmallCapInvestor PRO advisory service. The winner of the voting process gets a one-year subscription to ALL of my advisory and trading services ($2,680 value), plus a signed copy of the book and three t-shirts.

*****The Managed America Internet video conference airs tonight at 6:00 P.M. It's free to attend and there's still time for you to register. Click here to register for this free online event.

Best Regards,

Ian Wyatt
Editor
SCI Daily

Stocks closed lower today as investors took some profits off the table after the market had a long sustained rally. The Dow closed down 39.22 points to 9,280.97; the Nasdaq finished at 1,993.05, down 18.26 points; and the S&P 500 stayed over 1,000 to close at 1,002.72, down 2.93 points.
 

The Russell 2000 was down 4.75 points to close the day at 565.99.

Small-cap price gainers were lead by Radian Group (NYSE:RDN) up 83% on news that the firm handily beat Wall Street expectations. Wall Street had called for the firm to report a quarterly per share loss of $1.51 while the Radian actually reported $2.82 to the positive. Radian's revenues were reported at $577.4 million, with analysts calling only for $284 million.

Other small-cap gainers include Triad Guaranty (Nasdaq:TGIC) up 65%; American Axle & Manufacturing (NYSE:AXL) up 44%; and UQM Technologies (AMEX:UQM) up 31%.

*****Stocks rallied out of the hole yesterday, as expected. It should be clear now that government intervention in the financial markets is supporting asset prices across the board. That includes cars, houses, stocks, bonds - you name it.

Now, I don't mean to suggest that economic fundamentals support current stocks prices. Most likely, earnings expectations and valuations are getting a little out of whack. Barron's has the P...E ratio for the Dow Industrials at 14.76 and the Wall Street Journal says it's 15.03. And forward estimates are about the same. In the current environment, that's fair value at best.

At worst, earnings estimates are too aggressive and valuations should be lower. While the U.S. economy is expected to grow slightly this quarter, I don't see that translating to earnings surprises when third quarter earnings come in. If companies can manage to meet expectations, I'd consider that a victory. Clearly, I don't see much upside for valuations based on fundamentals.

For the bulls, however, the story is about how much downside there is. And again, the government is saying "not much."

*****70% of the U.S. economy is consumer spending. That's a big ratio, and it shows why the U.S. can plunge in to recession easily. It also shows why I expect it to take a while before we return to decent growth rates.

The unemployment rate is pushing 10%. Economists expect it to move into double-digits in early 2010. Personally, I can't believe it will take that long.

The U.S. lost 371,000 jobs in July. Since December 2007, 6.5 million jobs have been lost. There were 5.7% fewer job cuts announced in July than a year ago. That's supposed to sound like the rate of job losses is slowing. And believe it or not, some economists are saying that payrolls could actually rise some in early 2010. Sounds crazy, I know.

But suppose payrolls start rising at the same rate they've been declining? If 371,000 people get jobs every month, it'll take 17 months to get the unemployment rate back where it was when the recession began. That would put the U.S. economy back on track by January 2011 at the absolute earliest.

*****One aspect of government intervention (which I call "Managed America"), is that the U.S. dollar is being systematically devalued. Against the Euro, it's trading lower than when that currency was introduced. (Reference point: today the U.S. dollar fetches just 0.69 Euros while back on January 1, 1999-when the Euro was introduced-you could get 0.86 Euros for your dollar. That's a 25% long-term slide in the value of the dollar.)

This is having a profound effect on commodity prices. Oil, copper, even steel prices are up significantly this year. And given China's continually robust demand and the near certainty that the dollar will remain weak, investing in commodities is rewarding investors handsomely. And if inflation takes hold as the global economy starts to go and central bankers leave stimulative monetary policy in place, commodity prices will hit new all time highs.

My Global Commodity Investing advisory service is benefiting from current commodity prices and will provide one of the only safe havens if inflation picks up. You can find out more about Global Commodity Investing here.

*****The Managed America video conference is coming up next Monday, August 10 at 6:00 P.M. It's free to attend and you can register HERE.

Best Regards,

Ian Wyatt
Editor
SCI Daily

The Russell 2000 (NYSE: IWM) futures are up slightly and the small-cap index will likely open in positive territory.

Today will be a quiet day, with little news on the economic or corporate front. The Mortgage Bankers Association will reveal numbers on mortgage application volume for the week ended Jan. 4, but that measure typically gets little reaction from investors.

Overseas, the United Kingdom’s FTSE 100 index fell 1.4%, while Japan’s Nikkei 225 index climbed 0.5%.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Epicor Software Corp. (EPIC), up 15% on news it forecast fourth-quarter revenue above expectations.
• Triad Guaranty Inc. (TGIC), up 12%.
• Isle of Capri Casinos, Inc. (ISLE), up 12%.

Biggest percentage losers:

• InfoSpace, Inc. (INSP), down 49%.
• Premier Exhibitions, Inc. (PRXI), down 31%.
• Spectrum Control, Inc. (SPEC), down 15% on news that fourth-quarter earnings were below analysts’ expectations.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices posted losses today following mixed housing news and more mortgage concerns. The small-cap index fell 19.09 points, or 2.64%, to 704.86. The Dow Jones Industrial Average (INDU) lost 238.42 points, or 1.86%, to 12,589.07.

On a year-to-date basis, the Russell 2000 has declined 7.99%, while the Dow is down 5.09% and the S&P 500 has shrunk 5.32%.

Small-cap stocks opened in positive territory and then gained more following news of an announcement at 10 a.m. ET that pending U.S. home sales fell 2.6% in November to a reading of 87.6.

The decline is more than what economists were expecting, but investors apparently liked the fact that the figures for October and September were revised higher.

Additionally, the National Association of Realtors reported that it expects existing-home sales to hold steady during the following months before rising later in the year and improving in 2009.

“On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” said Lawrence Yun, NAR chief economist, in a statement. “On the other, consumers continue to wait for additional signs of market stabilization.”

The trade association forecasted that existing-home sales will total 5.66 million in 2007 and 5.70 million in 2008, compared with 6.48 million in 2006.

But even though stocks were posting modest gains, the momentum didn’t last and the bulls lost their footing.

One of the catalysts was speculation that Countrywide Financial Corp. (NYSE: CFC), the biggest U.S. mortgage lender, is facing bankruptcy due to swelling debt-protection costs. The Calabasas, Calif.-based company, which had liquidity problems last summer due to the meltdown in the subprime mortgage sector, issued a statement denying the rumors.

Nevertheless, investors became apprehensive. Last summer a number of mortgage lenders went bankrupt as U.S. home prices began to decline and borrowers were unable to service their loans.

By 11:30 a.m. ET, the Russell 2000 was in negative territory, where it spent the remainder of the session, except for a very brief foray above the flat line in the afternoon.

Adding to the bearish mood was Eric Rosengren, president of the Federal Reserve Bank of Boston, who told the Connecticut Business and Industry Association that the housing market will probably continue to stagnate in the first half of 2008.

However, Rosengren made sure to say that he is not predicting a recession.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Pharmasset, Inc. (VRUS), up 33% to $26.86 despite news of an analyst downgrade.
• Incyte Corp. (INCY), up 20% to $11.39 on news of positive preliminary results from a study of a drug for rheumatoid arthritis.
• Helen of Troy Ltd. (HELE), up 14% to $17.11 on news of an analyst upgrade.

Biggest percentage losers:

• Triad Guaranty Inc. (TGIC), down 21% to $7.08.
• Measurement Specialties, Inc. (MEAS), down 19% to $17.36 on news it has lowered its guidance for fiscal 2008.
• ShoreTel Inc. (SHOR), down 15% to $5.09 on news it is being investigated for possible violations of federal securities laws.

Volume leaders:

• Akeena Solar, Inc. (AKNS) 6,352,700 shares traded.
• Radian Group Inc. (RDN) 4,038,400 shares traded.
• Origin Agritech Ltd. (SEED) 3,967,800 shares traded.

The day saw 256 small-cap stocks set 52-week lows, while six caps established 52-week highs.

The Russell 2000 (NYSE: IWM) is falling as investors take a dim view of the state of the U.S. housing market. At 1:53 p.m. ET, the small-cap index was down 3.57 points, or 0.49%, to 720.38. The Dow Jones Industrial Average (INDU) was up 3.41 points, or 0.03%, to 12,830.90.

Stocks have trimmed their morning gains and small caps have fallen in the red following news that Countrywide Financial Corp. (NYSE: CFC), the biggest U.S. mortgage lender, is facing swelling debt-protection costs.

There’s speculation that the Calabasas, Calif.-based company, which had liquidity problems last summer due to the meltdown in the subprime mortgage sector, could file for bankruptcy later this week.

That’s a stark reminder of the depth and size of the mess in the subprime mortgage sector, which began as U.S. home prices started to decline in the second half of 2006, leading to a wave of foreclosures and loan delinquencies.

A number of mortgage lenders have called it quits since then, but Countrywide will potentially be the biggest casualty yet.

That has apparently spooked investors.

Shortly after the start of trading the National Association of Realtors reported that pending U.S. home sales fell a more-than-expected 2.6% in November to a reading of 87.6. The October reading was an upwardly revised 89.9. The figure for September was also revised higher.

Some observers saw a silver lining, saying that the numbers indicate that existing-home sales will hold steady in the coming months before rising late in the year.

But others point out that the data point to a housing market stagnation that has no end in sight.

“It seems all but certain that residential investment also declined in the fourth quarter of 2007,” said Eric Rosengren, president of the Federal Reserve Bank of Boston, in a speech to the Connecticut Business and Industry Association this afternoon. “Many economic forecasts expect residential investment to continue to decline at least through the first half of 2008.”

But Rosengren made sure to stay away from predicting a recession.

“Previous periods where residential investment declined for a year or more were either accompanied by, or closely followed by, an economic downturn,” he said. “But history may or may not repeat itself.”

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Pharmasset, Inc. (VRUS), up 28% despite news of an analyst downgrade.
• PROS Holdings, Inc. (PRO), up 14%.
• DivX Inc. (DIVX), up 14% on news that Sony Corp. (SNE) will offer video content on the DivX format.

Biggest percentage losers:

• Measurement Specialties, Inc. (MEAS), down 22% on news it has lowered its guidance for fiscal 2008.
• COMSYS IT Partners, Inc. (CITP), down 12%.
• Triad Guaranty Inc. (TGIC), down 14%.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices dropped on news that the Fed lowered its target interest rate 0.25%. The small-cap index let go 24.93 points, or 3.15%, to 766.27. The Dow Jones Industrial Average (INDU) lost 294.26 points, or 2.14%, to 13,432.77.

On a year-to-date basis, the Russell 2000 is down 2.69%, while the Dow has advanced 7.68% and the S&P 500 has added 4.31%.

Stocks sank today as investors were apparently disappointed after the U.S. Federal Reserve decided to lower its target for the federal funds rate 0.25% to 4.25%.

“Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending,” the Federal Open Market Committee said at about 2:15 p.m. ET, in a statement accompanying the decision. “Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time.”

Wall Street was expecting the reduction, with some voices calling on the central bank to act more boldly to prevent the possibility of the U.S. economy falling into recession due to declining house prices and fallout from the meltdown in the subprime mortgage sector.

Small-cap stocks, which opened on a bullish note and were holding on to modest gains, reacted to the news by going on a steep descent.

The Fed, which has now voted for a cut during each of its most recent three meetings, promised to “act as needed” to keep the economy humming along and inflation in check.

The federal funds rate is the rate at which commercial banks make overnight loans to each other.

In addition, the Fed announced it’s lowering the discount rate, the rate it charges for direct loans to banks, 0.25% to 4.75%. That move is intended to encourage commercial banks to borrow more readily from the Fed, thus loosening the grip of the credit squeeze that took hold as the number of bad loans increased over the past months.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Genesis Microchip Inc. (GNSS), up 57% to $8.49 on news it is being purchased by STMicroelectronics NV (STM) for about $336 million.
• Cost Plus, Inc. (CPWM), up 17% to $5.54.
• FuelCell Energy, Inc. (FCEL), up 16% to $11.85 on news of a narrower fourth-quarter loss.

Biggest percentage losers:

• NCI Building Systems, Inc. (NCS), down 21% to $28.12 on news of a decline in fiscal fourth-quarter profit.
• Triad Guaranty Inc. (TGIC), down 16% to $8.80.
• Cardica Inc. (CRDC), down 15% to $9.16 following news on Tuesday of a partial exercise of the over-allotment option granted to the underwriters of its public offering.

Volume leaders:

• Genesis Microchip Inc. (GNSS) 14,870,000 shares traded.
• Hoku Scientific, Inc. (HOKU) 7,720,800 shares traded on news the company’s director sold 45,000 shares of common stock under a prearranged trading plan.
• FuelCell Energy, Inc. (FCEL) 7,516,700 shares traded on news of an analyst downgrade.

The day saw 64 small-cap stocks set 52-week lows, while eight small caps established 52-week highs.

The Russell 2000 (NYSE: IWM) futures have moved up and the small-cap index is likely to open in positive territory.

The bulls are ready to go on speculation that the U.S. Federal Reserve will cut its target interest rate when it meets in December. The speculation is due to a speech by chairman Ben Bernanke after the close on Thursday, during which he said that uncertainty has increased and the Fed must remain alert.

In economic news, the U.S. Commerce Department reported that consumption increased 0.2% in October, below the rate projected by economists. Consumption added 0.3% in September.

The lackluster performance can be blamed on a slowdown in the labor market, higher energy prices and the seemingly never ending slump in the housing sector.

Investors will also be looking at data on October construction spending, which will be released by the U.S. Census Bureau at 10 a.m. ET. Economists are expecting to see a decline.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

• SeaChange International Inc. (SEAC), up 25% on news it swung to a third-quarter profit.
• Triad Guaranty Inc. (TGIC), up 18%.
• China Finance Online Co. Ltd. (JRJC), up 12%.

• i2 Technologies, Inc. (ITWO), down 15%.
• Pacific Ethanol, Inc. (PEIX) down 5%.
• DivX Inc. (DIVX) down 4%.

Small-cap stocks jumped nearly 3% today, propelled by surprise earnings from Wal-Mart and an easing of credit fears. The Russell 2000 (NYSE: IWM) added 22.06 points, or 2.88%, to 789.15, snapping a two-day losing streak. The Dow Jones Industrial Average (INDU) gained 319.54 points, or 2.46%, to 13,307.09, its first rise in four sessions.

On a year-to-date basis, the Russell 2000 has advanced 0.22%, while the Dow has risen 6.67% and the S&P 500 has added 4.55%.

Trading got off to a bullish start this morning on news that Wal-Mart Stores Inc. (NYSE: WMT) saw a 7.9% increase in third-quarter profit at its U.S. stores, while revenue rose 8.9%.

The result pleasantly surprised analysts and eased fears that the U.S. consumer was cutting back on spending. Americans do about 10% of their shopping at the Bentonville, Ark.-based retailer, which began offering discounts two weeks earlier than last year to lure customers.

Stocks were gaining momentum, with the Russell 2000 adding more than 1% within the first 30 minutes of trading.

The bears had no chance, even after Bank of America Corp. (NYSE: BAC) said that it projects a fourth-quarter pre-tax charge of $3 billion due to its purchase of collateralized debt obligations that have plummeted in value because of the stagnating U.S. housing market. Collateralized debt obligations are loans—such as mortgages—that are pooled together and sold to institutional investors as a package.

The real story was Goldman Sachs Group Inc. (NYSE: GS), which announced that it doesn’t plan any significant writedowns on mortgage-related assets. That’s a welcome sign that shocks from this summer’s subprime mortgage meltdown may be coming to an end.

Partially as a result of the news, equities spent the second half of the session on a steep upward trajectory.

Separately, the National Association of Retailers reported after the start of trading that its index of pending home sales unexpectedly rose 0.2% in September, the first increase since June.

However, existing-home sales are forecast at 5.67 million in 2007, compared with 6.48 million in 2006. Sales of new homes are also projected below their 2006 level.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 30% to $9.27. A company representative could not be reached for comment.
• Xerium Technologies Inc. (XRM), up 23% to $5.85 on news its CFO bought 25,000 shares on the open market, raising his stake to almost 25%.
• BIDZ.com Inc. (BIDZ), up 22% to $17.80 on news of a rise in third-quarter profit.

Biggest percentage losers:

• TravelCenters of America LLC (TA), down 28% to $17.16 on news it swung to a third-quarter loss.
• Akeena Solar Inc. (AKNS), down 25% to $5.50 on news of a wider third-quarter loss.
• ISTA Pharmaceuticals Inc. (ISTA), down 12% to $5.59 after shares rose on Monday when its drug candidate received positive study results.

Volume leaders:

• Powerwave Technologies Inc. (PWAV) 5,149,100 shares traded.
• MGIC Investment Corp. (MTG) 5,085,600 shares traded on speculation that investors are looking to buy the insurer’s stock.
• Nektar Therapeutics (NKTR) 4,028,100 shares traded on news it has resolved contractual issues with Pfizer Inc. (PFE).

The day saw 33 small-cap stocks set 52-week lows, while 11 small caps established 52-week highs.

The Russell 2000 (NYSE: IWM) is posting gains this afternoon as investors respond to better-than-expected earnings from Wal-Mart and a drop in the price of oil. At 2:17 p.m. ET, the small-cap index had advanced 14.25 points, or 1.86%, to 781.34. The Dow Jones Industrial Average (INDU) was up 223.54 points, or 1.72%, to 13,211.09.

Futures were higher and the day began on a bullish note following news that Wal-Mart Stores Inc. (NYSE: WMT) reported a 7.9% increase in third-quarter profit at its U.S. stores, while revenue rose 8.9%. The increase was primarily due to discounts that began two weeks earlier than last year.

The result pleasantly surprised analysts and eased fears that the U.S. consumer was cutting back on spending. Americans do about 10 percent of their shopping at the Bentonville, Ark.-based retailer.

Stocks’ upward trajectory was not affected by news that Bank of America Corp. (NYSE: BAC) is projecting a fourth-quarter pre-tax charge of $3 billion due to its purchase of collateralized debt obligations. Like many other financial actors, the second largest bank in the United States is taking a hit from fallout of the stagnation in the housing market.

Collateralized debt obligations are loans—such as mortgages—that are pooled together and sold to institutional investors as a package.

Meanwhile, the price of oil has dropped $3.83 to $90.79 after the International Energy Agency lowered its forecast for global oil demand in 2008. The Paris-based intergovernmental organization also lowered its forecast for oil demand in the fourth quarter of 2007.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 24%. A company representative could not be reached for comment.
• BIDZ.com Inc. (BIDZ), up 17% on news of a rise in third-quarter profit.
• Veraz Networks Inc. (VRAZ) up 19% on news of a partnership with Alvarion Ltd. (ALVR) to deliver multimedia products.

Biggest percentage losers:

• TravelCenters of America LLC (TA), down 20% on news it swung to a third-quarter loss.
• Akeena Solar Inc. (AKNS), down 21% on news of a wider third-quarter loss.
• Nastech Pharmaceutical Company Inc. (NSTK), down 15%. A company representative could not be reached for comment.

The Russell 2000 (NYSE: IWM) moved lower today on news from Wachovia Corp. (NYSE: WB) of more than $1 billion in losses due to the credit crunch. The small-cap index dropped for the third time this week, retreating 8.52 points, or 1.09%, to 772.38. The Dow Jones Industrial Average (INDU) shed 223.55 points, or 1.69%, to 13,042.74.

On a year-to-date basis, the Russell 2000 has lost 1.92%, while the Dow has advanced 4.56% and the S&P 500 has added 2.62%.

The bears dominated the session today following news that Wachovia expects to suffer additional losses of $1.1 billion in the third quarter due to collateralized debt obligations.

The Charlotte, N.C.-based bank, the fourth largest in the United States, also said that it will write down collateralized debt obligations of about $1.11 per share for the month of October and expects to see loan losses of over $500 million in parts of the country that have been most severely affected by the slump in the housing sector.

The news comes as the latest reminder that the subprime mess continues to plaque the financial system.

The small-cap futures were pointing south and the Russell 2000 joined the other major U.S. indices in opening with a drop.

There was some upbeat economic news today, coming in the form of a surprise narrowing of the U.S. trade deficit. The Commerce Department reported that the deficit declined 0.6% to $56.5 billion in September, the lowest level since May 2005, as exports increased due to a weak dollar and strong growth overseas. In August the deficit stood at $56.8 billion.

But investors were not impressed, possibly because the same government report showed that import prices rose 1.8% in October, above the projected 1.3%. That’s a troubling sign that imports are contributing to inflation in the United States. Import prices added 0.8% in September.

Separately, an index of consumer confidence fell to its lowest level in two years in November, as Americans became less confident about the economy and less willing to spend money.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 28% to $8.58. A company representative could not be reached for comment.
• Omega Financial Corp. (OMEF), up 17% to $30.56 on news it is being acquired by F.N.B. Corp. (FNB) for $393 million.
• FTD Group Inc. (FTD), up 15% to $14.50 on news of higher fiscal first-quarter profit.

Biggest percentage losers:

• Virco Manufacturing Corp. (VIRC), down 18% to $9.90. A company representative could not be reached for comment.
• Home Diagnostics Inc. (HDIX), down 17% to $7.13 on news of an analyst downgrade.
• HFF Inc. (HF), down 16% to $6.70 on news of a decline in third-quarter net income.

Volume leaders:

• Security Capital Assurance Ltd. (SCA) 5,266,200 shares traded.
• Powerwave Technologies Inc. (PWAV) 4,964,200 shares traded on news of an analyst upgrade.
• Visteon Corp. (VC) 4,421,800 shares traded on news of job cuts at a company factory.

The day saw 93 small-cap stocks set 52-week lows, while 10 small caps established 52-week highs.

China Techfaith Wireless Comm. Tech. Ltd. (Nasdaq: CNTF), Fushi International Inc. (Nasdaq: FSIN) and North American Galvanizing & Coatings (Nasdaq: NGA) are among the most actively traded companies in Tuesday pre-market trading among those with market capitalizations under $750 million:

The Russell 2000 (NYSE: IWM) and the other major U.S. indices raced ahead today on news of solid earnings from big players. The small-cap index added 15.28 points, or 1.90%, to 821.39. The Dow Jones Industrial Average (INDU) gained 134.78 points, or 0.99%, to 13,806.70.

On a year-to-date basis, the Russell 2000 has increased 4.31%, while the Dow has added 10.68% and the S&P 500 has gained 8.38%.

Futures were pointing up and trading began in the green following news that Microsoft Corp. (Nasdaq: MSFT) increased its first-quarter net income 23% to $4.29 billion, or $0.45 per share, above the $0.39 per share projected by analysts. The rise was due to a whooping 87% growth in the company’s entertainment and devices segment, primarily due to strong sales of its video game “Halo.”
 
Adding to the upbeat pre-market sentiment was Countrywide Financial Corp. (NYSE: CFC), the largest mortgage lender in the United States, which said that it will return to profitability in the fourth quarter after losing money in the third quarter due to the meltdown in the subprime mortgage sector.

The bulls took control of trading out of the gate and kept their feet to the pedal throughout the session. With positive earnings news grabbing the headlines, the bears decided to sleep.

But there was some negative news, coming in the form of a larger-than-expected drop in October consumer confidence. The Reuters/University of Michigan final sentiment index fell to a reading of 80.9, the lowest level in more than a year. Economists were expecting to see a decline to a level of 82 from 83.4 in September.

That’s evidence that the stagnation in the U.S. housing sector is sapping Americans’ willingness to spend money, but investors did not appear to be bothered.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 41% to $8.53. A company representative could not be reached for comment.
• Graham Corp. (GHM), up 28% to $57.25 on news of a sharp increase in second-quarter profit.
• US BioEnergy Corp. (USBE), up 20% to $7.59. A company representative could not be reached for comment.

Biggest percentage losers:

• Trident Microsystems Inc. (TRID), down 41% to $7.15 on news of an analyst downgrade and a quarterly profit miss.
• Online Resources Corp. (ORCC), down 31% to $8.53 on a weak fourth-quarter outlook and news that third-quarter profit missed expectations.
• Clayton Holdings Inc. (CLAY), down 22% to $5.48 on news of a third-quarter loss.

Volume leaders:

• Trident Microsystems Inc. (TRID) 35,146,000 shares traded on news of an analyst downgrade and a quarterly profit miss.
• Visual Sciences Inc. (VSCN) 9,182,700 shares traded on news it is being purchased by Omniture Inc. (Nasdaq: OMTR) for $394 million.
• Hovnanian Enterprises Inc. (HOV) 5,411,400 shares traded.

The day saw 55 small-cap stocks set 52-week lows, while 43 small caps established 52-week highs.

Triad Guaranty Inc. (Nasdaq: TGIC), Graham Corp. (AMEX: GHM) and US BioEnergy Corp. (Nasdaq: USBE) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage gainers:

The Russell 2000 (NYSE: IWM) is posting gains midway though the session, buoyed by earnings news. At 1:34 p.m. ET, the small-cap index had added 8.66 points, or 1.07%, to 814.77. The Dow Jones Industrial Average (INDU) was up 78.12 points, or 0.57%, to 13,750.04.

Trading began on a bullish note as investors responded to news that Microsoft Corp.’s (Nasdaq: MSFT) first-quarter earnings beat Wall Street’s projections. The Redmond, Wash.-based company posted a stunning 87% growth in its entertainment and devices segment, primarily due to strong sales of its video game “Halo.”

Meanwhile, Countrywide Financial Corp. (NYSE: CFC), the largest mortgage lender in the United States, said that it will return to profitability in the fourth quarter and outpace projections after taking a hit in the third quarter due to the meltdown in the subprime mortgage sector this summer.

In small-cap news, industrial products maker Graham Corp. (AMEX: GHM) increased its quarterly profit seven-fold, while Gulf Island Fabrication, Inc. (Nasdaq: GIFI) stumbled after missing analysts’ third-quarter profit expectations.

Elsewhere, the U.S. dollar has fallen to another all-time low against the euro. One greenback can now be exchanged for 0.695 of the currency adopted by 13 countries in the 27-member European Union. This morning the dollar was at 0.698 euros.

The weak dollar is contributing to another rise in the price of oil, which is denominated in the U.S. currency. A barrel of oil now costs $90.99, up $0.53. Earlier in the day the price of oil was closer to $92 a barrel.

Contributing to latest increase in the price of oil is news on Thursday of U.S. sanctions against Iran and a shutdown of some production in Nigeria, Africa’s largest exporter. Oil reached its all-time inflation adjusted high of $101.70 in April 1980.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 34%.
•Graham Corp. (GHM), up 20% on news of a steep rise in second-quarter profit.
• DXP Enterprises Inc. (DXPE), up 15% on news of a rise in third-quarter profit.

Biggest percentage losers:

• Trident Microsystems Inc. (TRID), down 42% on news of an analyst downgrade and a quarterly profit miss.
• Online Resources Corp. (ORCC), down 33% on news of a poor fourth-quarter outlook.
• Clayton Holdings Inc. (CLAY), down 22% on news of a third-quarter loss.

The Russell 2000 (NYSE: IWM) is the top performer as the major U.S. indices rise on news of upbeat earnings.

At 10:25 a.m. ET, the small-cap index had gained 9.11 points, or 1.13%, to 815.22. The Dow Jones Industrial Average (INDU) was up 94.78 points, or 0.69%, to 13,766.70.

The small-cap futures were pointing north following news that Microsoft Corp. (Nasdaq: MSFT) reported after Thursday’s close that its first-quarter earnings beat analysts’ expectations, mainly due to strong sales of the videogame “Halo.”  The Redmond, Wash.-based also raised its outlook for the full fiscal year.

Contributing to the upbeat sentiment is Countrywide Financial Corp. (NYSE: CFC), the largest mortgage lender in the United States, which announced that it will return to profitability in the fourth quarter and beat Wall Street’s expectations. The New York-based company also reported a third-quarter net loss, its first in a quarter century, due to the meltdown in the subprime mortgage sector this summer.

Among small-cap companies, Callidus Software Inc. (Nasdaq: CALD) has been left behind after reporting a wider-than-expected third-quarter net loss.

In economic news, U.S. consumer confidence tumbled more-than-expected. The Reuters/University of Michigan final sentiment index fell in October to a reading of 80.9, the lowest level in more than a year. Economists were expecting to see a decline to a level of 82. The index was at 83.4 in September.

The drop reflects ongoing recession in the housing sector, which is sapping Americans’ willingness to spend money.

Overseas, the major Asian and European exchanges posted gains, with Japan’s Nikkei 225 adding 1.36%, while the United Kingdom’s FTSE 100 index moved up a modest 0.2%.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Triad Guaranty Inc. (TGIC), up 16%.
• Graham Corp. (GHM), up 14% on news that second-quarter profit beat Wall Street’s forecast.
• Mercury Computer Systems Inc. (MRCY), up 13%.

Biggest percentage losers:

• Trident Microsystems Inc. (TRID), down 40% on news that quarterly financial results missed expectations.
• BankAtlantic Bancorp Inc. (BBX), down 44% on news of a third-quarter loss.
• Online Resources Corp. (ORCC), down 29% on news of fourth-quarter guidance below projections.

Qiao Xing Universal Telephone, Inc. (Nasdaq: XING), Sierra Wireless, Inc. (Nasdaq: SWIR) and Transmeta Corp. (Nasdaq: TMTA) are among the most actively traded companies in Friday pre-market trading among those with market capitalizations under $750 million:

Sturm, Ruger & Co. (NYSE: RGR), Triad Guaranty Inc. (Nasdaq: TGIC) and Barrett Business Services, Inc. (Nasdaq: BBSI) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

Shares of Triad Guaranty Inc. (Nasdaq: TGIC) tumbled to a 52-week low after the company was downgraded today by Bear Stearns to “underperform” from “peer perform,” on account of claims that rose at a higher-than-expected pace in the third quarter.

The small cap, which provides private mortgage insurance products to residential mortgage lenders and investors, reported an abysmal third quarter late Wednesday evening. For the quarter ended Sept. 30, 2007, the Winston-Salem, NC.-based firm recorded a net loss of $31.8 million, or $2.13 per share, compared with net income of $19.4 million, or $1.30 per share, for the same quarter in 2006. The mean earnings estimate of six analysts polled by Thomson Financial was for earnings per share of $0.72.

Bear Stearns analyst Michael Nannizzi had estimated a loss of $0.31 per share for the third quarter assuming the company had built $50 million in reserves. Triad reported a loss on reserve-building of almost $80 million. Nannizzi lowered his rating on Triad Guaranty to reflect a much “sharper deterioration” in Triad’s portfolio than originally anticipated.

Primary delinquencies increased upwards of 27% to 7,541 from 5,940 from the second to the third quarter of 2007, according to Nannizzi.  Over the same period, according to Nannizzi, primary claims paid increased roughly 38% to $23.1 million from $16.7 million.

Nannizzi said he’s concerned with the company’s combination of high risk/capital ratio and higher than expected losses. He estimates the company’s risk/capital ratio at almost 18:1, compared with the industry average of below 10 times, and said he believes it would be “prudent” for Triad to remain below 20 times leverage.

“If losses continue to rise, in order to stay below 20 times leverage, the company’s ability to write new business will be limited,” Nannizzi wrote in a research note. “We believe losses will force the company to either allow its ratio to climb above 20x or not write new business—neither of which is an attractive option.”

Triad may experience more difficulty in writing new business than its peers, according to Nannizzi. One of Triad’s largest customers was American Home Mortgage and the analyst said he believes it will be very difficult for Triad to replace the volume it lost via American Home Mortgage.  

Additionally, Nannizzi says a high and rising risk/capital ratio could result in rating agency attention. According to Nannizzi, in previous reports, rating agencies looked favorably upon Triad’s minimal exposure to bulk and subprime; however, Nannizzi says the delinquency and claim performance of Triad’s portfolio has deteriorated even without a heavy concentration in bulk and subprime.

“The company's portfolio deteriorated substantially, despite its low exposure to bulk and
subprime,” Nannizzi wrote in a research note. “We had previously felt that Triad's focus on higher credits would allow it to experience lower losses.”

Nannizzi is lowering his estimates based on the belief that it will be difficult for the company to realize the value implied by its current net worth. The analyst is now estimating a loss of $2.07 for the fourth quarter. As of Oct. 25, six analysts surveyed by Thomson Financial are on average estimating net income of $0.65 per share.

Shares of Triad Guaranty (TGIC) sank 31%, or $2.56, to $5.68 at 1:00 p.m. ET. Shares of Triad Guaranty have been trading in the range of $7.40 to $58.62 for the past 52 weeks.

The Russell 2000 (NYSE: IWM) is in the green as news of a surprisingly bullish housing report offset generally negative economic reports.

At 10:42 a.m. ET, the small-cap index had gained 2.41 points, or 0.30%, to 813.26. The Dow Jones Industrial Average (INDU) had added 16.67 points, or 0.12%, to 13,691.92.

The small-cap futures were higher before the opening on news that Motorola Inc. (NYSE: MOT) reported its first profit in 2007. The Schaumburg, Ill.-based telecommunications giant also announced a better-than-expected outlook for the fourth quarter.

In economic news, orders for durable goods, which are intended to last at least three years, fell 1.7% in September, according to the U.S. Commerce Department. Economists were expecting a rise of 1.5% following a downwardly revised decline of 5.3% in August.

On the plus side, orders for non-defense capital goods excluding aircraft increased 0.4% after a rise of 1.8% in August. That measure is a key barometer of business spending and today’s reading is a sign that businesses are continuing to spend money on capital equipment despite the uncertain U.S. economic environment.

Elsewhere, the number of U.S. workers applying for jobless benefits fell less than expected for the week ended Oct. 20, the U.S. Labor Department said before the start of trading. Unemployment claims declined 8,000 to 331,000, while economists were calling for a much larger drop of 17,000.

The Russell 2000 cautiously opened slightly higher but quickly slipped below the flat line, weighed down by the bearish economic news.

The big surprise this morning came half an hour after the start of trading, when the U.S. Census Bureau announced that sales of new homes increased a healthy 4.8%, an annual rate of 770,000 in September. Economists were expecting to see a decline.

Stocks started climbing immediately, rapidly moving into positive territory.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Mercury Computer Systems Inc. (MRCY), up 25% on news of a narrower first-quarter loss.
• Transcend Services Inc. (TRCR), up 19% on news of improved third-quarter results.
• iRobot Corp. (IRBT), up 15% on news of a higher 2007 revenue guidance.

Biggest percentage losers:

• Sturm, Ruger & Company Inc. (RGR), down 41% on news of poor third-quarter results.
• Triad Guaranty Inc. (TGIC), down 27% on news of a third-quarter loss.
• Barrett Business Services Inc. (BBSI), down 16% on news that fourth-quarter earnings guidance missed Wall Street’s projections.

The Russell 2000 (NYSE: IWM) futures are higher and the small-cap index will likely open in positive territory.

The earnings season continues to march on, with attention this morning focused on Motorola Inc. (NYSE: MOT). The Schaumburg, Ill.-based telecommunications giant reported a third-quarter profit, its first in 2007, and announced a better-than-expected outlook for the fourth quarter.

In other news, orders for durable goods, which are intended to last at least three years, fell 1.7% in September, according to the U.S. Commerce Department. Economists were expecting a rise of 1.5% following a revised decline of 5.3% in August.

Silver lining came in the form of a 0.4% increase in orders for non-defense capital goods excluding aircraft, after a rise of 1.8% in August. That measure is a key barometer of business spending.

At 10 a.m. ET, the U.S. Commerce Department will release the numbers on new homes sales in September. Economists are expecting to see a decline.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Transcend Services Inc. (TRCR), up 17% on news of record third-quarter earnings.
• iRobot Corp. (IRBT), up 14% on news of a higher 2007 revenue outlook.
• ZOLL Medical Corp. (PLCE), up 12%.

Biggest percentage losers:

• Spartan Motors Inc. (SPAR), down 19% on news of a decline in third-quarter profit.
• Heelys Inc. (HLYS), down 11% on news of a lower third-quarter outlook.
• Triad Guaranty Inc. (TGIC) down 10% on news of a third-quarter loss.

China Precision Steel, Inc. (Nasdaq: CPSL), Ceragon Networks Ltd. (Nasdaq: CRNT) and Targa Resources Partners LP (Nasdaq: NGLS) are among the most actively traded companies in Monday pre-market trading among those with market capitalizations under $750 million:

The Russell 2000 (NYSE: IWM) and Dow lost big today as news of disappointing earnings and residual credit fears scared investors. The small-cap index suffered the biggest loss of the major U.S. indices, falling 26.24 points, or 3.18%, to 798.79. The Dow Jones Industrial Average (INDU) retreated for the fifth time this week, letting go 366.94 points, or 2.54%, to 13,522.02.

On a year-to-date basis, the Russell 2000 has increased 1.44%, while the Dow has added 8.34%.

The Russell 2000 futures were flat before the start of trading but the index opened in negative territory on news that Charlotte, N.C.-based Wachovia Corp. (Nasdaq: WB), the fourth largest U.S. bank, reported a 10% decline in its third-quarter profit due to difficult credit market conditions.

The bank also said that that it recorded a provision for credit losses of $408 million, about four times the level during the same three months of 2006.

The news came as an unpleasant reminder that the turmoil in the subprime mortgage sector, which peaked during summer months, is still relevant and capable of spreading shockwaves throughout the financial sector.

The subprime mortgage sector started bleeding earlier this year after U.S. housing prices went into reverse in the second half of 2006. The ongoing housing recession has been identified by observers as the biggest risk to the economy.

Today heavy equipment maker Caterpillar Inc. (NYSE: CAT) became the latest in a long list of casualties.

The Peoria, Ill.-based company, a Dow component, announced that quarterly profit missed analysts’ forecasts. Caterpillar attributed the shortfall to a decline in machinery sales to nonresidential builders, a worrying sign that the commercial construction sector could go the way of residential construction.

The bears took the reins and spent the rest of the session dragging stocks down.

Today’s corporate news increases the possibility of another cut in the target interest rate when the U.S. Federal Reserve convenes for a two-day meeting on Oct. 30.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• CyberSource Corp. (CYBS), up 18% to $14.90 on news of a rise in third-quarter profit.
• LaserCard Corp. (LCRD), up 14% to $10.17 on news of a narrower second-quarter loss.
• Authorize.Net Holdings Inc. (ANET), up 13% to $21.58. A company representative could not immediately be reached for comment.

Biggest percentage losers:

• Triad Guaranty Inc. (TGIC), down 20% to $7.46. A company representative could not immediately be reached for comment.
• China Architectural Engineering Inc. (RCH), down 17% to $12.03.
• Isramco Inc. (ISRL), down 15% to $39.21. The company said it could not comment on the movement of its stock.

Volume leaders:

• Targa Resources Partners LP (NGLS) 10,281,200 shares traded, on news it is offering more shares for sale.
• CyberSource Corp. (CYBS) 4,640,000 shares traded.
• Coldwater Creek Inc. (CWTR) 4,343,100 shares traded.

Triad Guaranty Inc. (Nasdaq: TGIC), Nanophase Technologies Corp. (Nasdaq: NANX) and Isramco, Inc. (Nasdaq: ISRL) are among the biggest percentage losers in Friday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

The Russell 2000 (NYSE: IWM) is posting steep losses as investors react to news of poor earnings and more credit fears. At 1:37 p.m. ET, the small-cap index was down 13.78 points, or 1.67%, to 811.25. The Dow Jones Industrial Average (INDU) had retreated 2098.26 points, or 1.5%, to 13,680.70.

The bears have been running the show ever since Wachovia Corp. (Nasdaq: WB) reported before the opening that its third-quarter profit fell 10% due to difficult credit market conditions.

Charlotte, N.C.-based Wachovia, the fourth largest U.S. bank, also said that it recorded a provision for credit losses of $408 million, about four times the level during the same three months of 2006.

Contributing to more poor earnings news was heavy equipment maker Caterpillar Inc. (NYSE: CAT), which announced that quarterly profit missed analysts’ forecasts. The company forecasts that the ongoing slump in the U.S. housing sector will result in a 12% drop in sales of machinery and engines in 2007. Peoria, Ill.-based Caterpillar expects international sales to pick up the slack.

In commodities news, the price of oil has eased $1.43 to $88.04 a barrel. The recent spike in oil prices was partially attributed to tensions along the border between Iraq and Turkey and the weakness of the U.S. dollar.

Like most other commodities, oil is denominated in dollars.

Thus far today, the U.S. dollar has appreciated slightly. The greenback can now be exchanged for about 0.701 euros, whereas it began the day at just below 0.6995 of the currency used by 13 countries in the 27-member European Union.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• CyberSource Corp. (CYBS), up 22% on news of a higher third-quarter profit.
• Authorize.Net Holdings Inc. (ANET), up 16%.
• LaserCard Corp. (LCRD), up 14% on news of a narrower second-quarter loss.

Biggest percentage losers:

• Angiotech Pharmaceuticals Inc. (ANPI), down 3% on news of a lowered 2007 outlook.
• Triad Guaranty Inc. (TGIC), down 18%.
• Nanophase Technologies Corp. (NANX), down 16% on news of a wider-than-expected third-quarter loss.

The Russell 2000 (NYSE: IWM) edged out a gain while the Dow Jones Industrial Average (INDU) fell after news of weak earnings from Bank of America (NYSE: BAC) and Pfizer (NYSE: PPE) reminded investors that the subprime crisis is negatively impacting corporate earnings. The small-cap index added 0.14 points, or 0.02%, to 825.03. The Dow shed 3.58 points, or 0.03%, to 13,888.96.

Bank of America Corp.’s third-quarter net income plunged 32% due to write-downs on leveraged buyout loans and higher credit loss provisions. The firm’s third-quarter profit was $3.7 billion, or $0.82 per share, below analyst expectations of $1.06 per share and from $5.4 billion, or $1.18 per share, during the same period of 2006.

In other bearish news, Pfizer Inc.’s third-quarter net income plummeted 77%, due to a $2.8 billion charge related to the company exiting its insulin product Exubera. The company made the decision to exit Exubera because of intense competition from generic competitors. Pfizer’s third-quarter net income totaled $0.76 billion, or $0.11 per share, below Wall Street projections of $0.52 per share and from $3.36 billion, or $0.46 per share, a year earlier.

At 8:30 a.m., the U.S. Department of Labor said the number of Americans filing first-time applications for state unemployment benefits increased beyond economists’ expectations. For the week ended Oct. 13, the number of initial jobless claims rose to 337,000, above a forecast 315,000 and compared with 309,000 during the prior week.

Earnings from Bank of America and Pfizer overshadowed Nokia Corp.’s (NYSE: NOK) strong third-quarter results. The mobile device maker reported an 85% increase in third-quarter profit, on a 26% increase in the number of phones shipped in the quarter.

The Dow fell as much as 60 points early in the trading day, but bounced back as bargain hunters entered the market, hoping the Federal Reserve might lower interest rates again.

In energy news, crude-oil futures rose $2.28 to $89.67 a barrel.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap below $750 million:

Biggest percentage gainers:

• WSI Industries Inc. (WSCI) up 30.6% to $6.75.
• Ascent Solar Technologies (ASTIZ) up 26.3% to $9.40.
• Fonar Corp. (FONR) up 24.5% to $7.32.

Biggest percentage losers:

• Triad Guaranty Inc. (TGIC), down 26.1% to $9.29, as the mortgage sector took a hit. when MGIC Investment Corp. (NYSE: MTG) reported millions in losses due to unpaid loans.
• Novastar Financial Inc. (NFI), down 19.4% to $5.95.
• Avici Systems Inc. (AVCI), down 18% to $9.18.

Volume leaders:

• Nektar Therapeutics (NKTR) 19,304,700 shares traded.
• Pier 1 Imports Inc. (PIR) 7,096,200 shares traded.
• Usec Inc. (USU) 5,959,300 shares traded.

Triad Guaranty Inc. (Nasdaq: TGIC), NovaStar Financial Inc. (NYSE: NFI) and Avici Systems Inc. (Nasdaq: AVCI) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

The Russell 2000 (NYSE: IWM), along with the other major U.S. indices, is treading lower this morning after disappointing earnings from Bank of America Corp. (NYSE: BAC) refreshed investors’ concerns that the subprime mortgage debacle is materially cutting into corporate earnings and the economy.

At 10:37 a.m. ET, the small-cap index had shed 1.33 points, or 0.16%, to 823.56. The Dow Jones Industrial Average (INDU) was down 25.61 points, or 0.18%, to 13,866.93.

Bank of America’s third-quarter net income plunged 32% on account of write-downs on leveraged buyout loans and higher credit loss provisions. The firm’s third-quarter profit was $3.7 billion, or $0.82 per share, below analyst expectations of $1.06 per share and from $5.4 billion, or $1.18 per share, during the same period of 2006.

Adding to bearish earnings news, Pfizer Inc.’s (NYSE: PFE) third-quarter net income plummeted 77%, due to a $2.8 billion charge related to the company exiting its insulin product, Exubera. The company made the decision to exit Exubera because of intense competition from generic competitors. Pfizer’s third-quarter net income totaled $0.76 billion, or $0.11 per share, below Wall Street projections of $0.52 per share and from $3.36 billion, or $0.46 per share, a year earlier.

Earnings from Bank of America and Pfizer overshadowed Nokia Corp.’s (NYSE: NOK) strong third-quarter results. The mobile device maker reported an 85% increase in third-quarter profit, on a 26% increase in the number of phones shipped in the quarter.

As stocks sold off, treasuries rose for the fourth straight trading session for the first time since August, as the effects of the credit crisis reared its ugly head on reducing earnings at some of the largest U.S. banks. The yield on the two-year note fell to 3.92% at 10:06 a.m.

The odds for a quarter-percentage point Fed rate cut at the Oct. 31 meeting rose to 68% odds from a 54% chance Wednesday. The increased odds of a Fed rate cut sent the dollar tumbling to a record low against the euro. The dollar fell to $1.42 against the euro at 11 a.m. ET.

In economic news, the U.S. Department of Labor reported early this morning that initial jobless claims for the week ended Oct. 13 rose to 337,000 from 309,000 last week and above the forecasted 315,000 claims economists had anticipated.

The Philadelphia Fed index, a regional manufacturing index for Pennsylvania, New Jersey and Delaware, is due out at noon today. Economists are forecasting a level of 7 for the month of October, down from the previous month’s level of 10.9. A reading above zero signifies expansion.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap below $750 million:

Biggest percentage gainers:

• Fonar Corp. (FONR), up 35%, on news that it received six orders from Health Diagnostics.
• WSI Industries, Inc. (WSCI), up 23.8% on an increased sales outlook.
• Rimage Corp. (RIMG), up 17% on news that its third quarterly profit is up.

Biggest percentage losers:

• Novastar Financial (NFI), down 17% as the company may be forced to delist from the NYSE.
• Avici Systems, Inc. (AVCI), down 15% after it missed third-quarter revenue estimates.
• Triad Guaranty Inc. (TGIC), down 12%, as mortgage insurers continue to be beat down after large mortgage insurer MGIC Investment Corp. (NYSE: MTG) reported millions in losses due to unpaid loans.

A rollercoaster ride of trading today ended with the Russell 2000 (NYSE: IWM) gaining ground while the Dow fell after news of a temporary rise in the price of oil. The small-cap index added 1.54 points, or 0.19%, to 824.89. The Dow Jones Industrial Average (INDU) shed 20.40 points, or 0.15%, to 13,892.54.

On a year-to-date basis, the Russell 2000 has increased 4.76%, while the Dow has added 9.11%.

Stocks began on a bullish note following news of better-than-expected third-quarter earnings from tech sector heavyweights Intel Corp. (Nasdaq: INTC) and United Technologies Corp. (NYSE: UTX), but quickly shed those gains halfway through the trading session as the price of oil briefly rose to an intraday high above $88 a barrel.

Investors got jittery around noon ET, after the Turkish parliament overwhelmingly approved a military attack into northern Iraq in order to fight Kurdish rebels, causing the price of oil to clear $88 a barrel before moderating down to $87.40. A cross-border spat could disrupt Iraq’s oil supplies.

Nevertheless, small caps managed to sneak into positive territory just before the close, while the Dow languished in the red.

Meanwhile, U.S. housing starts fell to the lowest annualized pace in 14 years in September. The U.S. Census Bureau announced today that housing starts fell to 1.191 million, missing economists’ projections of 1.285 million. The level in August was an upwardly revised 1.327 million of privately owned housing units.

The stagnation in the housing sector seems to have no end in sight, as building permits, an indicator of future construction plans, also fell.

“The housing sector will get worse,” said Kurt Karl, head of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “We could easily get as low as one million starts in the 4th [quarter] or the 1st of next year.”

“Historically, such a low level of starts has been associated with a recession,” he warned.

In other economic news, the U.S. Labor Department reported that core inflation, which excludes the cost of food and energy, came in at 0.2%, as projected. The consumer price index, the main measure of inflation, grew 0.3% in September, just above the expected rise of 0.2%.

The numbers tell us that inflation is in check and that the biggest challenge facing the U.S. economy comes from the agonizing housing sector.

The U.S. Federal Reserve appears to agree. Its beige book, a survey of regional economic conditions released eight times a year, showed that the pace of economic growth slowed down since August.

“The fourth quarter is likely to be slower than the third,” Karl commented. “I do not see much of a pick up until early 2008.”

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• China Techfaith Wireless Communication Ltd. (CNTF), up 25% to $7.90.
• LeCROY (LCRY), up 19% to $9.46 on news of a rise in first-quarter profit.
• Fuel Tech Inc. (FTEK), up 17% to $33.52 on news of a $7.2 million contract with the Chinese government.

Biggest percentage losers:

• Triad Guaranty Inc. (TGIC), down 22% to $12.57, as the mortgage sector took a hit when MGIC Investment Corp. (NYSE: MTG) reported millions in losses due to unpaid loans.
• First Cash Financial Services Inc. (FCFS), down 12% to $20.99 on news of third-quarter earnings below analysts' projections.
• Thomas Group Inc. (TGIS), down 11% to $9.09 on news of a decline in third-quarter profits and revenue.

Volume leaders:

• China Techfaith Wireless Communication Ltd. (CNTF) 13,224,100 shares traded.
• China Precision Steel Inc. (CPSL) 6,844,500 shares traded.
• Coldwater Creek Inc. (CWTR) 4,476,400 shares traded.

Triad Guaranty Inc. (Nasdaq: TGIC), WebMD Health Corp. (Nasdaq: WBMD) and ACA Capital Holdings, Inc. (NYSE: ACA) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

The Russell 2000 (NYSE: IWM) has erased its morning gains after news of a fresh spike in the price of oil. At 1:32 p.m. ET, the small-cap index was down 3.53 points, or 0.43%, to 819.82. The Dow Jones Industrial Average (INDU) had shed 74.14 points, or 0.53%, to 13,838.80.

The price of oil continues to set record highs, up $0.54 to $88.15 a barrel on news that the Turkish parliament overwhelmingly approved a military attack into northern Iraq in order to fight Kurdish rebels.

Military conflict could disrupt supplies from Iraq, the world’s third largest exporter.

Stocks started falling soon after 12 p.m. ET, the early gains made after major tech players reported better-than-expected earnings quickly disappearing.

Meanwhile, U.S. President George Bush said today that homeowners need help in order to avoid foreclosures, but spoke out against a bailout of lenders whose loose lending practices contributed to the current housing recession.

Speaking of the housing recession, before the opening the U.S. Census Bureau announced that housing starts for the month of September fell to an annualized pace of 1.191 million, the lowest in 14 years. Economists were expecting a rate of 1.285 million units following August’s upwardly revised level of 1.327 million privately owned housing units.

Building permits, an indicator of future construction plans, also fell.

In other economic news, the consumer price index, the main measure of inflation, grew 0.3% in September, just above the expected rise of 0.2%.

However, core inflation, which excludes the cost of food and energy, came in at 0.2%, as projected.

The numbers reveal that inflation is in check and that the biggest challenge facing the U.S. economy is the seemingly never-ending slump in the housing sector.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• China Techfaith Wireless Communication Technology Ltd. (CNTF), up 24% on news of a contract with the Chinese government.
• Alto Palermo S.A. (APSA), up 14%
• Fuel Tech Inc. (FTEK), up 13% on news of a $7.2 million contract.

Biggest percentage losers:

• Triad Guaranty Inc. (TGIC), down 18%.
• Thomas Group Inc. (TGIS), down 10% on news of a lower third-quarter profit.
• Advanced Battery Technologies Inc. (GBT), down 9%.

Triad Guaranty Inc. (Nasdaq: TGIC), National Security Group (Nasdaq: NSEC) and NovaStar Financial Inc. (NYSE: NFI) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers: